Imagine this. You need funds urgently. But your savings fail you and so do your friends and family. Worst still, your credit card is maxed out. The only way out for you can be the gold lying idle in your safes. No, you don’t need to part with it for good but put it as collateral for a loan.
The loan acquired against the security of gold is known as a gold loan. The gold loan comes with a host of benefits, making it the most popular loaning option in India. Here are a few of them.
Retain your gold:
You might have inherited gold jewelry from your family or bought it to mark an auspicious occasion. In either case, you are emotionally attached to it. The idea of disposing of such a valued inheritance and a keepsake might be hard on you. But don’t worry. With an online gold loan, you can raise funds to meet urgent requirements and still retain your gold. Just pay the principal and applicable interest as per the schedule and reclaim your gold upon loan term expiry.
Low-interest rates:
A loan is as good as its overall cost of borrowing. Here too, Muthoot fincorp’s gold loan online fares better than most loan types. The loan against gold is secured, as you get it against the security of gold. The lenders don’t have much at stake even if you default. They’ll simply auction your pledged yellow metal to recover the amount. Therefore, you can expect as low as 13% lending rates across loans against gold, provided you prefer the right lender.
Low miscellany expenses:
Processing fees, prepayment charges, valuation fees, penalties, and other hidden charges are also a contributor to your cost of borrowing besides interest rates. With the right lender, you can skip these expenses outright or reduce them considerably. Muthoot Fincorp charges just 0.25% of the sanctioned loan as processing fee, which is perhaps lowest in the industry. Plus, valuation fees are modest while no prepayment charges apply with Muthoot fincorp’s gold loan online. The NBFC even rewards you with cashback on regular on-time payments.
Trouble-free loaning:
Put to past the hassles that loaning is otherwise associated with. The gold loan is easily gettable from banks and NBFCs with minimal documentation and easy eligibility requirements. For eligibility, you need to be an Indian citizen, aged between 18 and 65 years, salaried or self-employed. You can apply online, walk into the lender’s branch office or call their customer service. The processes are even simpler and quicker with an NBFC vis-à-vis a bank.
Personalized repayments:
The online gold loan allows for easy and customized repayment schedules. You can repay the loan within 7 days to 60 months, depending on your repayment capacity and the lender’s tenor policy. Muthoot Fincorp even accepts payments on a daily, weekly and monthly basis, should you need variable payment options. Plus, there’s an option to repay the principal in one lump sum when the term ends. For the interest component, you can pay it easy monthly installments.
Secure storage:
Any reliable lender is mindful of what the pledged gold means to you. So, they use security measures like strong vaults with 24/7/365 electronic and human surveillance to safeguard it for the entire gold loan term. Lenders like Muthoot Fincorp even insure your pledged gold. In case the gold is lost in a robbery, you’ll be paid the equivalent of the gold’s existing market price.
No-strings-attached:
The house loan is earmarked for house purchases while you can only purchase a car with a car loan. On the contrary, Muthoot fincorp’s gold loan online can be used to fund anything, as no end-usage restriction apply. Think business expansion, settling the medical bill, high-end marriage, foreign trip, higher education or any other urgent requirement, the possibilities are simply endless.
Demerits:
Alas, no loan is perfect. Trade-offs are always there. Here’re a few demerits of gold loan:
- If you default, the lender can sell the gold. In that case, you’ll lose your cherished keepsake at a fraction of its actual market prices.
- The Loan To Value (LTV) ratio in an online gold loan is up to 65%. That means your gold worth INR 10 lakhs will fetch you just 6.5 lakhs in the loan.